BSNL board to review GSM tender on Monday

The BSNL board will meet on Monday to review its multi-billion dollar GSM tender for 45.5 million GSM lines for which the PSU had shortlisted Ericsson and Nokia. According to a senior BSNL executive, the board during its meeting would examine various options, including going ahead with the tender in the present form, limiting it to only 2G lines or calling for a fresh tender.

“The managing committee is considering all the options — we will come out with something acceptable to all,” BSNL director finance SD Saxena told newspersons.

During the board meet, the PSU will also finalise its replies to telecom minister A Raja’s queries on the tender where Swedish telecom major Ericsson had emerged as the lowest bidder at $107 per line.

This board meet comes as a five-member committee, set up by BSNL to look into the re-evaluation of the tender and prepare a response to Mr Raja’s queries, has submitted its findings to the BSNL management. The PSU board will now study the findings before presenting it to the minister.

Last month Mr Raja had asked BSNL to negotiate a lower price, less than $100 per line, with Ericsson for the $4.8 billion contract. When Ericsson refused to reduce prices any further, the minister, had advised BSNL to drop the 3G component in the tender and thereby halve the total size of the contract to about 23 million lines.

Mr Raja had also advised BSNL to opt for a fresh tender for about 90 million lines exclusively for 3G after the 3G spectrum policy is announced.

At the same time, Mr Raja in a note to BSNL has also questioned the logic of awarding the contract to Ericsson when Motorola had supplied similar equipment to public sector MTNL at much lower price and asked the PSU to clarify the reasons for Motorola’s disqualification from the tendering process. BSNL has always maintained and had even told the Delhi HC that Motorola was disqualified as it failed to pass the technical evaluation tests.

As reported first by ET, if BSNL were to drop the 3G component from the tender, it will have to reconsider the bids of Motorola and Chinese equipment maker ZTE, both of whom were disqualified by BSNL on the grounds that they had failed to meet the stringent technical criteria stipulated by the tender, especially with regard to 3G component, which constituted 25% of the 45.5 million lines.

Earlier this week, BSNL employees had gone on a day-long strike to protest the delay in awarding the contract. The employee unions, when calling off the strike had given the PSU management 15 days time to resolve the issue.

Last year, following its disqualification, Motorola had approached the Delhi High Court seeking a stay in awarding the contract, stating that its bid was Rs 3,500 crore lower than that of Ericsson which had quoted a price of around Rs 22,594 crore. Motorola had, however, withdrawn the case recently.